What expenses can I claim?

kriso

I am doing my 06/07 return that is due the end of this month. I am a self employed sole trader with quite a simple business.

At the moment I don't have an accountant so am doing my return myself.

How much of my London Underground travel can I claim as a business expense. When I buy a travel card it is used for both business and personal, as there isn't any point spending an additional £80 a month just to keep them seperate. I'd say out of all the travel I do, at least 80-90% must be for business use.

The same question for my mobile phone topups. I only have one phone that is used for business and personal use. I'd say maybe 30-40% usage is for business.

I work from home. Can I claim a portion of my rent and internet bill as business use, and how much roughly do you think is suitable?

Many thanks for your help

Mike_by_the_Sea

Hi kriso

In my experience, you should be able to claim the travel and mobile expenses as identified. The key thing is to have a breakdown of the expenses to show how you have got to the percentages - a couple of months is a good start. This can then give you a baseline for using these assumptions on an ongoing basis.

In respect of working from home, I believe the IR will accept £25 a month to cover use of home as your office and a similar analysis of your internet in terms of percentage business / personal use as with the travel and mobile expenses.

Also, if you haven't done already, you could build up an asset register for your home office equipment and claim capital allowances.

Good luck with the return

Mike

fengirl_2

With reference to your claim for use of a room at home, you need to claim the proportion relating the the number of rooms occupied by the business. So, if you have 3 beds and 2 receps and use one bed for business, you would include one fifth of your heat and light. You dont include the bathrooms and kitchen as everyone has to go to the loo and eat! You cannot claim your rent or council tax as you would have to pay these whether or not you worked from home. HMRC assumes that your heat and light bills will be higher wokring from home.
The other questions regarding travel and phone calls - yes you claim the %age which you estimate to be business use.

Savvy_Sue

Be careful of setting aside a room exclusively for business use: if you do this I believe you can be charged Capital Gains Tax when you sell the house. So, a desk in the 'spare' bedroom is fine, or a fold out bed in the 'office' is fine, as long as it's not exclusive use.

fengirl_2

You mention rent on your property, so I assumed you did not own your house when I responded.
However, in 26 years, I never saw anyone incur a CGT liability for working from home. The proportion of the gain over the period a room might be used for business is likely to be very small and within the annual exemption. Against this must be taken the cost of renting an office for business along with all its associated costs.

Savvy_Sue

Sorry, I posted half asleep and missed the rent bit. I'm not saying the CGT often happens, it's just something that's been pointed out to me and as it isn't hard to get round it makes sense to me to do so.